A truncated form of the membrane-type matrix metalloproteinase-1 [(Ala(21)-Ile(318))proMT1-MMP] lacking the hemopexin-like and trans-membrane domain was produced in E. coli. We demonstrate that the recombinant proenzyme was autoproteolytically processed to a fully active catalytic domain with N-terminal Ile(114). The catalytic domain of MT1-MMP initiated the activation of progelatinase A and progelatinase A complexed with tissue inhibitor of metalloproteinases-2 (TIMP-2). As a typical soluble metalloproteinase it was able to cleave physiologic as well as synthetic substrates. Our kinetic data demonstrate that TIMP-2 is a potent inhibitor for the recombinant enzyme.